Global competition over critical minerals has intensified in recent years. In particular, rare earths have become a focal point in major powers’ efforts to safeguard supply chains, reshape industrial structures, and gain an edge in the clean-energy race. From the United States rebuilding its refining capacity, to the European Union advancing its Critical Raw Materials Act, to Japan expanding its magnetic-materials technology base, an “ex-China” rare-earth supply chain is steadily taking shape. At the same time, Greenland, long seen as peripheral, has experienced a sudden surge in strategic attention. Since 2025, Greenland’s Premier Jens-Frederik Nielsen has openly signaled where the island stands, affirming cooperation with the United States and the European Union and calling on Japan to participate in Greenland’s rare-earth development, while also making clear that China is excluded.
This stance is not an emotional outburst from the island’s political leadership, but rather aligns closely with the shifting dynamics of global rare-earth competition, i.e., moving away from traditional industry-chain rivalry toward a form of structural differentiation that now blends values, geopolitics, and security considerations. Against this backdrop, China still commands the world’s most comprehensive, cost-competitive, and large-scale rare-earth industry chain, but its real strategic risk is not the oft-cited “loss of discourse power”. The deeper concern is that global rare-earth resource development is systematically releasing new supply, and Western countries’ self-sufficiency is steadily rising. As a result, the window for China to maintain price stability and reduce the international market’s hypersensitivity is gradually narrowing. If that window closes amid new mines ramping up production and supply chains diversifying, rare-earth prices could enter a prolonged downturn, placing significant existential pressure on China’s rare-earth industry chain.
Greenland’s choice, therefore, carries significance that goes beyond political symbolism and may become a key factor driving an expansion in global rare-earth supply and putting downward pressure on prices.
For starters, Greenland’s political alignment has shifted from a resource island to a “values anchor” in Western supply chains. The island’s policy change has drawn attention not only because of its stance excluding China, but also because its structural move to embed itself within Western supply-chain systems has become unmistakably clear. Greenland is evolving from a simple resource exporter into a pivotal support point for the West’s effort to build a “politically reliable” supply chain. On one hand, its alignment fits neatly with the value-based narratives that Western countries have constructed around “critical mineral security” in recent years. The United States has brought rare earths under the Defense Production Act; the European Union has established supply-security red lines through the Critical Raw Materials Act; and Japan has placed rare earths on par with semiconductors as strategic materials. Within this discursive framework, Greenland has been actively incorporated into the West’s value-chain narrative, emerging as a key node in a “democratic supply chain”. This means Greenland no longer views rare earths simply as economic commodities, but as elements woven into its political identity and diplomatic orientation. Its exclusion of China is therefore not merely a commercial decision but the outcome of overlapping forces, namely its geopolitical positioning, its institutional affinities, and the logic of governance in the Arctic.
On the other hand, Greenland’s own governance needs are also pushing it further toward the U.S. and Europe. The island’s economy has long relied on Danish subsidies, with a narrow industrial base and significant fiscal pressures. Developing rare earths is seen as one of the few opportunities for Greenland to achieve sustainable economic growth. Moreover, what the West offers is not just a one-off investment, but long-term institutional support spanning infrastructure, digital governance, scientific research, and climate funding. This kind of institutional investment is far more valuable than purely capital-based cooperation and aligns much more closely with Greenland’s pursuit of sustainable development.
Additionally, Greenland’s political alignment is closely tied to Arctic strategy. The commercial development of Arctic shipping routes and the growing politicization of Arctic governance have made its position increasingly crucial. Strengthening its coordination with the NATO system not only helps Greenland enhance its voice in Arctic governance but also naturally leads it to exclude external actors operating under different political systems.
This political embedding also offers China a deeper warning: competition over rare earths is shifting from an industrial arena to a geopolitical one. Future price battles and changes in supply–demand structures are likely to be triggered within this very process of political alignment.
More importantly, Greenland’s latest moves reinforce the structural expansion of global rare-earth supply. U.S. domestic mines returning, Australia is accelerating production increases, and projects in Canada, Namibia, and other countries are advancing, while the European Union is pushing several feasibility studies of its own. With Greenland joining in, these expansion efforts may shift from isolated, country-by-country initiatives toward a more coordinated Western collective. The outcome will likely go far beyond simply reducing dependence on China. It may manifest in several ways, like a steady rise in total global rare-earth supply over the next five to ten years; mounting mid-term oversupply pressures; a transition in rare-earth pricing from structural scarcity to structural surplus; and a weakening of China’s ability to stabilize prices and maintain its dominance across the industry chain.
At the same time, Japan’s participation may further reinforce this trend. Japan holds global strengths in refining, recycling, and advanced microstructural control of high-end magnetic materials, and it is the only country capable of competing with China in high-performance NdFeB magnet technologies. The combination of Greenland’s resources with Japan’s technological capabilities provides precisely the missing piece the West needs to build a fully integrated mine-to-magnet supply chain.
Furthermore, Greenland is expected to serve as a model region for Western “green mineral standards”. Systems for green rare-earth certification, transparency audits, and supply-chain traceability are steadily becoming institutionalized. Over time, these standards may evolve into exclusive rules that could squeeze China’s large-scale products out of certain high-end markets. This also implies that future rare-earth pricing trends will be driven not only by supply and demand, but increasingly by institutional forces. Greenland’s participation enhances the credibility of these emerging norms and increases their potential spillover effects.
Then, there is the impact on China’s control over rare earths and the potential restructuring of global power dynamics. Greenland’s actions carry implications for China not merely because of political alignment, but due to its potential role as a catalyst for a structural expansion of global rare-earth supply, which could pose three key risks for China.
First, the gradual expansion of global supply could ultimately trigger a structural decline in rare-earth prices. The West has the capacity to achieve gradual self-sufficiency in rare earths, and the combined potential supply from Australia, the U.S., Greenland, Canada, and Southern Africa could meet global demand. Therefore, China’s true challenge may not be the bypassing of its supply chain, but rather its ability to assert influence over the international rare-earth market in the coming years. If China fails to align prices with its advantages across the entire industry chain, a surge of new global production could trigger a prolonged decline in rare-earth prices. Once the industry enters a low-price cycle, Chinese companies are likely to bear the brunt of the impact first. This is because China’s rare-earth system, with its complete industry chain and numerous production stages, bears higher long-term costs from environmental standards, resource taxes, and social responsibilities, leading to fixed and operational expenses far above those of resource-export-focused countries. When global supply continues to exert downward pressure on prices, these structural costs will be magnified, making the impact on Chinese firms potentially far more severe than on single-mine countries.
Second, the spillover of Western institutional regulations could gradually exclude China from high-end Western demand. Greenland is poised to become a model for the West’s promotion of green rare-earth standards. If a green certification system gains wide acceptance, future rare-earth pricing mechanisms will no longer be determined solely by the market, but will incorporate institutional premiums. China’s dominance in the sector could therefore be weakened at the institutional level.
Third, Western strategic control over Arctic resources could shape the future allocation of those resources. Greenland’s alignment signals a further consolidation of Western dominance over Arctic resource routes, potentially limiting China’s future opportunities for scientific research, shipping, and resource cooperation in the region.
All in all, Greenland’s choice may signal that the global rare-earth supply chain is gradually entering a new cycle of “supply expansion—institutional reinforcement—geopolitical acceleration”. Indeed, since the U.S. and other Western countries resumed domestic rare-earth production, a series of challenges has emerged. Recently, due to disputes over wastewater treatment, Lynas’s Texas rare-earth production project faces the risk of cancellation.
Yet, both U.S. government subsidies and manufacturers’ new technological developments are continuing to advance. Greenland’s rare-earth development plans, combined with expansion trends in Australia, the U.S., Canada, and other countries, indicate that Western self-sufficiency in rare earths is entirely achievable, and it simply requires time. As these projects come online, a structural global oversupply of rare earths is likely to emerge, with prices potentially entering a prolonged downward trajectory.
Arguably, the essence of rare-earth competition lies not in discourse power, but in the future of prices; not in market share, but in the timing of cyclical windows. China is facing more than just being bypassed. It is confronting structural pressure that will emerge once a downward price cycle becomes increasingly evident. This leads to a key judgment: China’s true strategic risk in rare earths is not that the West will circumvent it, but that the country may miss the “final window for international desensitization and price stabilization”. Once global supply rises sharply, China’s vast rare-earth industry chain could face cyclical or even existential pressure.
The core task of China’s rare-earth strategy is, therefore, not merely to defend market share, but to rapidly desensitize the pricing system and reduce reliance on a single export category, accelerate the development of recycling systems and high-end magnetic materials to boost industry-chain profitability, build an international cooperation network to diversify overseas resources, participate in the formulation of “green mineral” standards to avoid future institutional exclusion, and proactively strengthen the industry’s resilience in anticipation of a long-term downward price cycle.
Final analysis conclusion:
Greenland’s alignment, while not a decisive force, symbolizes the deepening restructuring of Western supply chains. With multiple countries expanding production, new standards taking shape, and alliances strengthening, future rare-earth competition is likely to shift from resource control to a comprehensive contest of price cycles, institutional constraints, and supply-chain resilience. For China, the present represents not only a critical stage for maintaining the integrity of its industry chain but also an important window to achieve international market desensitization and price stabilization. Once the global new supply is released in full, China will face systemic pressures stemming from falling prices, tightening regulations, and shrinking external demand. Whether China can complete a strategic transformation before this window closes will directly determine the future competitiveness and survival space of its rare-earth industry.
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Zhou Chao is a Research Fellow for Geopolitical Strategy programme at ANBOUND, an independent think tank.
